Treasury & Risk "Whacking the System Over Breaking the Buck?" The article summarizes, "Spurred by the Reserve Primary Fund's drop below $1 a share in the wake of Lehman's fall, proposed SEC rules on money market funds could end up curtailing many companies' ability to raise short-term funds." It says, "If the Securities and Exchange Commission's proposed rules governing money market mutual funds see the light of day, corporate treasurers will have to dig deeper for their companies' short-term financing needs. The rules would, in effect, bar money market funds from investing in commercial paper issued by many of the country's largest and oldest companies.... [C]ritics charge that the commission is wielding a bigger stick than is necessary to tame an industry that needs scolding, at most. They contend that many major American companies' ability to issue commercial paper will be severely impaired, forcing some to abandon this form of short-term debt issuance for more expensive alternative financing." In other news, The Boston Globe writes "Harvard admits to $1.8b gaffe in cash holdings", which says, "The university disclosed yesterday that it had lost $1.8 billion in cash -- money it relies on for the school's everyday expenses -- by investing it with its endowment fund, instead of keeping it in safe, bank-like accounts.... Typically, companies and big institutions manage their cash conservatively in order to have it readily available, by keeping the money in such low-risk investments as money-market mutual funds."
